We have a choice: buybacks or bailouts. Buybacks are just a tax efficient method of transferring money from companies to their shareholders. That’s the reason why companies exist, to allow their shareholders to profit. The problem with buybacks is that they are easily gamed by
We see buyback requests from activists because it benefits them. Whether or not they are efficient is irrelevant.
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it benefits them only if the stock price is expected to increase, which means discounted future cash flows are expected to increase, ergo efficient
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